Just over 15 years ago, a realisation began to dawn on British politicians, triggered by the financial crash of 2008 and its effects on millions of ordinary lives.
Before that rupture, they had clung to the idea that a huge chunk of the public was made up of contented consumers and property owners. Now, though, any such certainties were being shaken – something highlighted by the Labour conference speech given in 2009 by Gordon Brown, which contained two particularly eye-catching words: “When markets falter and banks fail,” he said, “it’s the jobs and the homes and the security of the squeezed middle that are hit the hardest.”
All these years later, the idea of an outwardly comfortable part of society anxiously feeling the pinch seems even more relevant. That is not, of course, to suggest that there are not millions of people living in much more precarious circumstances, nor that a Labour government should not prioritise their needs. Contrary to what you might read in certain news outlets, the squeezing of the middle has nothing to do with VAT on private school fees or the hourly rate charged by nannies. But the relevant stats definitely speak volumes about anxiety and uncertainty eating into lives that would once have been considered secure, and what that means for a country now brimming with a seething resentment that mainstream politicians seem unable – or unwilling – to do anything about.
According to the Office for Budget Responsibility, after years of wage stagnation, between now and 2030, households’ average disposable income is set to grow by only 0.5% a year. We all know what that means: the sudden pang of worry at the supermarket checkout, summers spent at home, the prohibitive expense of family visits to restaurants that fall north of £100, and people’s understanding that their children are growing up in an even more harshly competitive economy and society than they did. That last point, moreover, highlights that as new generations come of age, the squeezed middle is only expanding.
The tale of last week’s budget is now curdling into questions about whether Reeves said misleading things about the public finances, but all this remains a massive part of the story – particularly when it comes to her extension of the freeze on tax thresholds. £50,000 a year is not really a sign of sky-scraping affluence, but people earning around that sum will be among those hit hardest. The verdict of Ruth Curtice, the chief executive of the Resolution Foundation, is stark: “All but the top 10% of the income distribution are worse off because of opting for threshold freezes over [income tax] rate rises.” By 2031, nearly one in four taxpayers will have some of their earnings taxed at the “higher” 40% rate; Labour MPs have reportedly been citing the idea of the squeezed middle in relation to the effects on nurses, teachers and police officers.
This is not the only element of Reeves’s new plan that is jangling nerves. The problem with her so-called smorgasbord approach to other tax rises is that it will surely look to millions of people like the government’s version of all that sneaky small print that fills up phone contracts and train-ticket regulations. Whether rightly or not, millions who would like to think of themselves as relatively secure and successful will look at what is planned – from more national insurance being levied on salary sacrifice pension contributions, reckoned to be paid by around a third of private sector employees, to a lower tax ceiling on cash Isas – and worry that they might sooner or later find themselves in the Treasury’s crosshairs.
The squeeze such people feel is not only to do with their own finances: it is also bound up with the awful state of the public realm, and how little the government has to say on the subject. Local councils’ budgets remain impossible, and cuts to grassroots services are continuing to bite, something that brings to mind a point made 25 years ago by the Oxford historian Ross McKibbin: “The middle classes make more use of the NHS, public transport, public libraries, local swimming pools, [and] public parks … than anyone else.” But if they look to politicians for answers, what do they hear? On a bad day, a shrill din about immigration and “integration” that leaves such absolute basics untouched.
Reeves and Keir Starmer personify an increasingly fragile and confused government, fixated on so-called hero voters in red wall constituencies, too keen on industrial nostalgia, and open to ideas that will only cause them even more problems: witness the influential Labour peer Maurice Glasman’s scorn for what he calls the “lanyard class”, a description that might describe just about everyone who gets on and off a commuter train each weekday. Worse still, the same contempt and condescension occasionally rears its head in a curled-lip mistrust of the middle class, sometimes voiced by people from the self-same layer of society.
The latter is crystallised by an issue I regularly write about: the state of England’s special educational needs system (which the OBR now suggests will soon be faced with a £6bn funding gap, with no clear indication from the education department of how it will be filled), and the government’s plans for reform, finally due in the new year. As far as anyone understands it, ministers are still considering limiting families’ rights of redress, amid constant talk in politics and the wider culture about unfair advantages and the idea that, to quote one Labour MP, the current set-up “inherently favours better-off parents … with know-how of the system”. The government’s favoured answer might not be to make sure that many more people can exercise their rights, but to take refuge in the kind of equality that means nobody has any meaningful rights at all.
I am a middle-class Send parent. If you take the long view, I have the relevant skills because I am the child of people whose lives were transformed by the Labour government of 1945-51, and huge social changes that took them from working-class backgrounds – my dad is the son of a coalminer – into university and secure public-sector jobs that firmed up the confidence that they passed on to me. These days, I sometimes wonder: are there politicians in the modern Labour party who think that kind of story might now have gone too far? And if policy starts to reflect the idea that people should pipe down and accept Whitehall’s idea of what best serves the common good, what does the government think that will mean for its popularity? Put another way, if such famous electoral stereotypes as Worcester woman and Mondeo man had kids with special needs, wouldn’t they doggedly battle the system, and be furious at the prospect of their ability to do so being taken away?
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I have been thinking lately about Herbert Morrison, the 20th-century Labour politician – and grandfather of that fallen party grandee Peter Mandelson – whose understanding of who his Labour needed to speak to and for was elegantly summed up by one of his biographers. Working-class voters were only part of the picture: Morrison, after all, “represented the suburbs, where lived the clerk, the minor civil servant, the municipal employee, the technician, the laboratory assistant, the elementary school teacher, the commercial traveller, the small tradesman and shopkeeper and the office executive”.
I know who those people’s modern heirs are, and how they increasingly feel. They are anxious and angry not only about their own lives, but an increasingly awkward political question: will Labour ever really understand them?
